trying to decide what to do

[DUMBAGAIN]

Its been a while since I last posted, but here is the update. We have about 25000 in credit cards and loans. We are about almost a year behind on most. We don't own a home, but both work. No savings. We are finally able to make payments. (long story on why we became so far past due). I have contacted a CCCS company, they have given us a budget and payment plan. Here is my concern, do you think if we sign up for a debt management program that my creditors will still try to sue us? That is my bottom line I don't want to get sued. So I need to either go for the debt management or file Chapter 13. I could finish the debt management in about 3 years verses 5 with the 13. We are in a 100% payback situation. I have also consulted with an attrny.

Thoughts?

[StartingOver08]

The advantage of filing a Ch 13 is that the court stands behind you and keeps ALL the creditors at bay. The number of months of repayment are anywhere from 36 to 60, many members of this board were able to get payment plans less than 60 months based on their situation. The 36 month plan is for those less than median income for their state. Because the Ch 13 is through the court system, you have a greater chance of success. The creditors can not violate by calling you. In fact, if a creditor does not file for a claim - they don't get paid! It is regulated by the Trustee and the attorney is there to help you with a plan. This is the way to go, get rid of the debt - learn to budget and have the backing of the courts to keep the creditors in line.

The CCCS debt management plan has a high failure rate AND the creditors CAN sue during the repayment period. There is no protection by the court. There is no protection by the debt management company. CCCS has certain creditors that they have agreeements with for workout plans, but they do not work with all creditors. You will continue to get the letters and phone calls from those creditors that CCCS can not work with. Also, your credit will be destroyed. IMHO debt management plans are not the way to go.

[DUMBAGAIN]

Thanks, as much as I don't want to file, I think that's what we should do. What it IMHO?

[StartingOver08]

Thanks, as much as I don't want to file, I think that's what we should do. What it IMHO?

IMHO = in my humble opinion

JMO = just my opinion

[catleg]

I wouldn't rush into any incremental payment plans just yet. Worst thing you can do for yourself is to reage the debt and hop back on the treadmill.

Being a year late gives you some leverage. Being able to file a CH13 does also.
I would exploit that and try to work out settlements with the individual creditors at around the 50% level, perhaps a little less if you're lucky.

[DUMBAGAIN]

I thought about settlement also, but it would take a least 1 month to get enough to offer most of them 50%, 3 of them are over 4000-5000, that would take longer. Not sure about that one....

[StartingOver08]

You have no savings - what most of the cc's want are lump sum settlements. I don't know your whole situation, but if you can come up with $10k to $12k a settlement might work for you. But then again, you have to pay taxes on it.

This is not an easy decision. But you might want to work on a speadsheet and figure out the amount of time it would take to generate $10-$12k to settle and compare it to your plan for BK.

[DUMBAGAIN]

I think I could come up with it (enough settlements) in about 2 years, BUT....I'll be really risking a law suit....I'm so sick of worrying at this point I think the BK 13 is best....